Federal Direct Loans

A government loan option for most IU students

If you’re an undergraduate or graduate student, you can apply for a Federal Direct Loan regardless of financial need or credit history. To apply for a Federal Direct Loan, you must file your FAFSA each year and meet the eligibility requirements:

What your loan pays for

If you meet all requirements, you can borrow up to an annual maximum and a lifetime maximum. Your loan will pay for your tuition, fees, room and board, books, and other education-related expenses. Any funds that remain after these items are paid will be refunded to you.

What do subsidized and unsubsidized mean?

There are two types of Federal Direct Loans: subsidized and unsubsidized.

Subsidized loans

Direct Subsidized Loans are available to undergraduate students whose Expected Family Contribution shows that they need money for college. If you get a Direct Subsidized Loan, the U.S. Department of Education pays any interest that accrues while you’re enrolled at least half time. (Note that there are certain situations where you’ll become responsible for paying interest on the loan.)

There is a time limit on how long you may receive Direct Subsidized Loans: up to 150 percent of the published length of your program.

Repaying your loan

You’ll begin repaying your loan six months after you graduate or drop below half-time status. First, you’ll be asked to complete exit counseling, which will provide you with information on repaying your loan. We’ll send you email to notify you when it’s time for you to go through exit counseling.

If you’re preparing for grad school

If you have received a bachelor’s degree and are taking preparatory coursework to gain admission to an IU Bloomington graduate program, you may be able to receive Federal Direct Loans for up to 12 months. You’ll need to submit a preparatory coursework appeal to be eligible.